Car sales in Vietnam rocket after registration fee cut

After the Government’s move to lower car registration fees by half took effect more than a week ago, the domestic car market has picked up.

car sales rocket after registration fee cut
An auto assembly line at Truong Hai Auto Corporation at Chu Lai Open Economic Zone in Quang Nam Province. - VNA/VNS Photo

Prime Minister Nguyen Xuan Phuc decided to cut 50 per cent of registration fees for locally-manufactured and assembled cars till the end of this year. The reduction was proposed by the Ministry of Industry and Trade to help local businesses recover production and trade as well as stimulating consumption of cars.

Cars currently have a registration fee of 12 per cent of the car value in Ha Noi, and 10 per cent in other cities and provinces nationwide.

Auto dealers said the number of car buyers had increased by some 20 per cent.

In the Vietnamese automobile market, locally-assembled cars are priced at the lowest from VND299 million (US$12,892) for Kia Morning and up to VND4.9 billion for Mercedes-Benz S 450 L Luxury.

For the cheapest Kia Morning priced at VND299 million, with a registration fee from 10 to 12 per cent, car buyers only need to pay VND14.95 million to 17.94 million, instead of VND29.9 million to 35.88 million as before.

For the best-selling cars in the Vietnamese auto market such as Toyota Vios priced from VND470 million to 570 million or Hyundai Accent with VND426 to 542 million, car buyers can save up to VND34.2 million due to the registration fee cut.

Luxury car production and assembly in the country with high prices will benefit the most. In Viet Nam, the only luxury car brand assembled in the country is Mercedes-Benz, with the most expensive model the S 450 L Luxury, priced from VND4.2 to VND4.9 billion. Registration fees were previously from VND420 million to VND596 million but now cost only from VND210 million to VND298 million.

Nguyen Thi Thuy, a car buyer in Ha Noi’s Hoang Mai District told Viet Nam News that she took advantage of the policy to buy a new car a few days ago.

“I planned to buy an old car due to a limited budget. However, I decided to buy a new one at the last minute thank to the registration fee reduction. I saved some VND40 million from the cut,” she added.

 

Some auto dealers in Ha Noi said the policy has been warming up the market after a long stagnation due to the COVID-19 pandemic.

Dinh Van Trong, director of Hyundai Dong Do, said the number of car transactions had increased by 30 to 40 per cent against the time of the height of the pandemic. Small cars with prices of VND500 to 600 million each had the highest sales. The market is receiving positive responses from the Government's stimulus policy while businesses also reduce the cost burden.

Nguyen Van Hau, a representative from Mazda Giai Phong, told Viet Nam News that their car sales increased from 42 in May to 120 in June (up 300 per cent) after the registration fee cut took effect. There were some 100 car buyers lodging deposits to buy cars before June 28 to enjoy the fee cut.

“We are offering VND40-80 million off depending on kinds of cars on registration fees for customers. After June 28, the number of signed contracts waiting for car delivery was still high. We still have 80 cars that have not been delivered to customers who reserved due to a lack of supply,” he said.

He added that car demand at his dealership was higher than the supply, making them roll back some promotional programmes which were applied during the COVID-19.

In areas neighbouring Ha Noi, car dealers' representatives also noted that the market for assembled cars had heated up, as opposed to imported cars. For example, Mitsubishi with six out of seven models imported cars, the number of transactions did not change significantly. Locally assembled car manufacturers had a sudden increase in the early days after the policy took effect.

Experts said car sales would continue to increase this month as many customers signed contracts before and would get their car later to enjoy the policy.

However, they said the registration fee cut only applies to domestically-assembled cars, so businesses need to balance their policies to avoid the situation of consumers turning their backs on local cars after the fee cut ends and waiting for imported ones. VIR

EuroCham proposes Gov’t to cut 50 per cent of registration fee for imported cars

EuroCham proposes Gov’t to cut 50 per cent of registration fee for imported cars

The European Chamber of Commerce in Vietnam (EuroCham) proposed the Government to apply the 50 percent registration fee reduction to all automotive assembly firms, importers and dealers of new vehicles.  

Prices of luxury cars from Europe will not go down immediately

Prices of luxury cars from Europe will not go down immediately

The import tariff on European car imports will be decreasing gradually by 7 percent per annum. It will take at least five years to see considerable price decreases.

 
 

Other News

.
Probe into Tenma Vietnam’s alleged bribery underway: police official
Probe into Tenma Vietnam’s alleged bribery underway: police official
BUSINESSicon  04/08/2020 

The investigation into the Japanese-invested Tenma Vietnam company’s allegation of bribing civil servants and tax and customs officers of northern Bac Ninh province is still ongoing, according to a police official.

VN textile, electronics hardest hit in pandemic: official
VN textile, electronics hardest hit in pandemic: official
BUSINESSicon  04/08/2020 

Textile and electronics have been the two export-oriented sectors mostly impacted by the COVID-19 pandemic, an official has said.

Vietnam prepares to receive investors from Japan, the US, EU
Vietnam prepares to receive investors from Japan, the US, EU
BUSINESSicon  04/08/2020 

Japanese businesses have begun relocating factories to Vietnam, and it is expected that American and European businesses will also come soon.

VN Civil Aviation Authority's plans for new Quang Tri Airport face opposition
VN Civil Aviation Authority's plans for new Quang Tri Airport face opposition
BUSINESSicon  04/08/2020 

The Civil Aviation Authority of Vietnam (CAAV) plans to build Quang Tri Airport in Quang Tri province, but experts disagree with the idea.

Vietnam factory activity dips in July as Covid-19 impacts grow
Vietnam factory activity dips in July as Covid-19 impacts grow
BUSINESSicon  03/08/2020 

Despite a drop in output in July, firms remained confident in the 12-month outlook for production.

Enticing legal changes lure in foreign investors
Enticing legal changes lure in foreign investors
BUSINESSicon  04/08/2020 

Foreign investors are making new investments moves into Vietnam on the back of supporting policies and new rules. However, as some legal concerns remain, the development of the next steps still requires some preparation. 

Summary of new points of amended Law on Investment 2020
Summary of new points of amended Law on Investment 2020
BUSINESSicon  03/08/2020 

After more than six years in effect, the Law on Investment has been officially amended with a number of new articles to improve the country’s appeal to higher-quality foreign investment flows.

Outlining the preferential mechanisms for new PPP projects
Outlining the preferential mechanisms for new PPP projects
BUSINESSicon  04/08/2020 

Public-private investment projects play a significant role in developing infrastructure and have the potential to accelerate large-scale construction works across the country.

Vietnam economic outlook remains positive despite Covid-19 resurgence: HSBC
Vietnam economic outlook remains positive despite Covid-19 resurgence: HSBC
BUSINESSicon  03/08/2020 

HSBC economists forecast GDP expansion of 3% in 2020 for Vietnam, the only ASEAN country they expect to have positive growth this year.

Vietnamese startups bag millions of US dollars despite COVID-19 pandemic
Vietnamese startups bag millions of US dollars despite COVID-19 pandemic
BUSINESSicon  03/08/2020 

A slew of Vietnamese startups managed to secure millions of US dollars even in the midst of the rapidly escalating COVID-19 pandemic.

Capital inflows to Southeast Asian startups up 91 percent despite outbreak
Capital inflows to Southeast Asian startups up 91 percent despite outbreak
BUSINESSicon  03/08/2020 

Southeast Asian startups, especially e-commerce and fintech companies, have witnessed a significant increase in investment between April and June.

Sky-high livestock prices may breach competition law
Sky-high livestock prices may breach competition law
BUSINESSicon  03/08/2020 

Although many livestock companies could face an inspection to ensure they follow through on commitments to cut their prices, the market outlook still looks dreary in spite of the government’s call to stabilise the selling cost of live pigs.

Aligning with trade remedy principles
Aligning with trade remedy principles
BUSINESSicon  03/08/2020 

The EU-Vietnam Free Agreement (EVFTA) is a giant leap for Vietnam in international integration.

Electricity of Vietnam suggests not to extend deadline for wind farm FiT
Electricity of Vietnam suggests not to extend deadline for wind farm FiT
BUSINESSicon  03/08/2020 

In order to ensure transparency and stability in the selling price of wind power, EVN opposes the Ministry of Industry and Trade's proposal to extend the deadline on the current feed-in tariff (FiT) scheme for wind power projects

Ministry seeks to further open petroleum retail market
Ministry seeks to further open petroleum retail market
BUSINESSicon  03/08/2020 

The Ministry of Industry and Trade has called for allowing all foreign investors to further participate in the petroleum retail market.

Shares to correct on worries of virus surge
Shares to correct on worries of virus surge
BUSINESSicon  03/08/2020 

 Vietnamese shares may continue to fall this week as a spike in fresh coronavirus cases fuelled concerns that the path to economic recovery could be hindered.

Vietnam fulfills international commitments as EVFTA takes effect
Vietnam fulfills international commitments as EVFTA takes effect
BUSINESSicon  03/08/2020 

Vietnam will continue to fulfill its international commitments so that it can take full advantage of the EU-Vietnam Free Trade Agreement (EVFTA) and recover its economy amid a resurgence of COVID-19 pandemic.

Vietjet reports loss of over VND2.1 trillion for H1
Vietjet reports loss of over VND2.1 trillion for H1
BUSINESSicon  03/08/2020 

Vietjet Aviation Joint Stock Company has reported a loss of over VND2.11 trillion (approx. US$90.5 million) in air transportation business in the first half of this year.

F&B firms prepare for possible second round of social distancing
F&B firms prepare for possible second round of social distancing
BUSINESSicon  03/08/2020 

Though local F&B businesses don't want social distancing to return in August, the experiences they had in April are helping them prepare.

Vietnam Airlines, ACV suffer heavy losses due to COVID-19
Vietnam Airlines, ACV suffer heavy losses due to COVID-19
BUSINESSicon  03/08/2020 

The COVID-19 pandemic has severely dragged down revenues of the Vietnam Airlines Corporation (Vietnam Airlines) and the Airports Corporation of Vietnam (ACV) in the second quarter of this year.

 
 
 
Leave your comment on an article

OR QUICK LOGIN